Licensing and the Metaverse

Monetizing the Metaverse

In the entertainment business, the adage is that “content is king”, but now IP is divine because consumers are spending real money for virtual goods and experiences. Whether it’s NFTs (non-fungible tokes), licensed skins for avatars, or access to digital events, the metaverse opens up a new revenue frontier for IP owners and licensors. Owning and controlling intellectual property is the key to monetizing the metaverse. Since Facebook rebranded itself as Meta Platforms Inc (or just plain “meta” for short), declaring itself to be “a metaverse company,” there’s been a widespread speculation about what’s in store for the next evolution of the internet, or “web 3.0”. I believe we’re living in the beginning days of a metaverse world right now; and the pandemic has accelerated the transition. As I write this, my eightyear-old is attending school virtually via Google classroom, I’m due on backto-back zoom meetings with people as far flung as Tokyo and Toronto, and later with the tap of an app I can watch a Korean drama while tucked up in bed or interact with friends and strangers alike via any manner of social media. As we increasingly interface virtually, brands will migrate to where the audience is. Fish where the fish are. For IP owners, this creates a big opportunity,

Jeff Norton is the author of MetaWars: Fight For the Future (Hachette) and its three sequels, and seven other novels including the new Dino Knights series (Scallywag Press). He’s the founder of IP company Dominion of Drama, a successful film & television producer (Trucktown, Susan Hill’s The Small Hand: A Ghost Story) and was formerly a SVP at Chorion Ltd. (then owner of Enid Blyton, Mr. Men, Agatha Christie, and producer of Octonauts and Olivia). He began his career at Procter & Gamble in brand management and holds an MBA from Harvard Business School. www.jeffnorton.com because brand equity is a valuable asset when consumers have affinity (and in some cases nostalgia) for what you own. The first opportunity for IP owners is in unique digital assets, commonly referred to non-fungible tokens (NFTs). These can take any shape, often digital artwork or virtual versions of real-world items. What makes them valuable is the same as original oil paintings, real estate, or limited batch wine: scarcity. NFTs can be traded but can’t be copied, so they are unique by definition and that’s what gives them perceived value, even if they have no intrinsic value. Legal copyright holders of IP can sell NFT versions of characters and artwork, but beware that you’ll likely have to defend your IP against digital knock-offs. It remains to be seen whether NFTs will become the next fine art market or Dutch tulip craze, but for now people are spending hard currency to acquire soft assets. The second opportunity is the exact opposite: instead creating scarcity, brand owners can make money by making scarce things more accessible. For example, physical events that could normally only be attended by a few, can now be opened up to the many. We’re already living through this business model: Netflix opens a movie across the globe in everyone’s living room or laptop, and the Master Class brand allows you to access a virtual masterclass from the likes of Chris Hadfield or Martin Scorsese. Of course, those are Web 2.0 2D experiences, and not particularly interactive, but it’s not a big leap to imagine a more immersive version with interactivity baked in. Roblox has held successful concerts in-world, and more and more games are being developed for VR, like last year’s hit Star Wars: Squadrons, which allows gamers to feel like they’re really flying an X-Wing Fighter. And consumer brands are piling in too. At CES, Procter & Gamble launched an immersive experience called BeautySphere, where users interact with its beauty brands, attend virtual panels, and take a virtual tour of Kew Gardens. Many of the opportunities of the metaverse aren’t completely evident yet, but for IP owners and licensors, there’s an opportunity for monetization now and perhaps more importantly to test and learn their way into this new space, to connect with their fans and fish where the fish are swimming to.